Assessing Lincoln Electric Holdings, Inc.'s (NASDAQ:LECO) past track record of performance is an insightful exercise for investors. It allows us to reflect on whether or not the company has met or exceed expectations, which is a great indicator for future performance. Today I will assess LECO's recent performance announced on 30 June 2019 and evaluate these figures to its long-term trend and industry movements.
Commentary On LECO's Past Performance
LECO's trailing twelve-month earnings (from 30 June 2019) of US$314m has jumped 21% compared to the previous year.
Furthermore, this one-year growth rate has exceeded its 5-year annual growth average of 5.2%, indicating the rate at which LECO is growing has accelerated. How has it been able to do this? Well, let’s take a look at whether it is merely because of an industry uplift, or if Lincoln Electric Holdings has experienced some company-specific growth.
In terms of returns from investment, Lincoln Electric Holdings has invested its equity funds well leading to a 37% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 14% exceeds the US Machinery industry of 7.8%, indicating Lincoln Electric Holdings has used its assets more efficiently. However, its return on capital (ROC), which also accounts for Lincoln Electric Holdings’s debt level, has declined over the past 3 years from 29% to 22%. This correlates with an increase in debt holding, with debt-to-equity ratio rising from 0.6% to 88% over the past 5 years.
What does this mean?
Lincoln Electric Holdings's track record can be a valuable insight into its earnings performance, but it certainly doesn't tell the whole story. While Lincoln Electric Holdings has a good historical track record with positive growth and profitability, there's no certainty that this will extrapolate into the future. I recommend you continue to research Lincoln Electric Holdings to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for LECO’s future growth? Take a look at our free research report of analyst consensus for LECO’s outlook.
- Financial Health: Are LECO’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 June 2019. This may not be consistent with full year annual report figures.
We aim to bring you long-term focused research analysis driven by fundamental data. Note that our analysis may not factor in the latest price-sensitive company announcements or qualitative material.
If you spot an error that warrants correction, please contact the editor at firstname.lastname@example.org. This article by Simply Wall St is general in nature. It does not constitute a recommendation to buy or sell any stock, and does not take account of your objectives, or your financial situation. Simply Wall St has no position in the stocks mentioned. Thank you for reading.